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EXHIBIT 1.1
EXECUTION COPY
HEALTHCOR HOLDINGS, INC.
AND
THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO
$80,000,000
11% Senior Notes due 2004
Purchase Agreement
November 24, 1997
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
CHASE SECURITIES INC.
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HEALTHCOR HOLDINGS, INC.
$80,000,000
11% Senior Notes due 2004
PURCHASE AGREEMENT
November 24, 1997
New York, New York
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
CHASE SECURITIES INC.
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies & Gentlemen:
HealthCor Holdings, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to Bear, ▇▇▇▇▇▇▇ & Co. Inc. and Chase Securities Inc.
(together, the "Initial Purchasers") $80,000,000 in aggregate principal amount
of 11% Senior Notes due 2004 (the "Initial Securities"), subject to the terms
and conditions set forth herein. The Initial Securities will be issued pursuant
to an indenture (the "Indenture"), to be dated the Closing Date (as defined),
among the Company, the Guarantors (as defined) and Norwest Bank Minnesota, N.A.,
as trustee (the "Trustee"). The Securities (as defined) will be fully and
unconditionally guaranteed on a senior unsecured and joint and several basis
(the "Subsidiary Guarantees") by the Company's present and future domestic
Subsidiaries (collectively, the "Guarantors"). Capitalized terms used herein and
not otherwise defined shall have the meanings assigned to such terms in the
Indenture.
1. Issuance of Securities. The Company proposes, upon the terms and
subject to the conditions set forth herein, to issue and sell to the Initial
Purchasers an aggregate of $80,000,000 in principal amount of Initial
Securities. The Initial Securities and the Exchange Securities (as defined)
issuable in exchange therefor are collectively referred to herein as the
"Securities."
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Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "Act"), the Initial Securities (and all securities issued in
exchange therefor or in substitution thereof) shall bear the following legend:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS
AND ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (a) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS A NON-U.S. PERSON THAT IS OUTSIDE THE
UNITED STATES; (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (a) TO THE COMPANY, (b) TO A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE),
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE), (E) OUTSIDE THE UNITED STATES
TO A PERSON THAT IS NOT A "U.S. PERSON"AS DEFINED IN RULE 902 UNDER THE
SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING
CASES TO ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF SUCH HOLDER'S
PROPERTY OR THE PROPERTY OF SUCH ACCOUNT AT ALL TIMES BE WITHIN ITS
CONTROL AND TO COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF ANY
JURISDICTION; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THE
TRANSFER RESTRICTIONS SET FORTH IN THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF ANY CERTIFIED SECURITY, THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE OF SUCH CERTIFIED SECURITY
RELATING TO THE
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MANNER OF SUCH TRANSFER AND SUBMIT SUCH CERTIFICATED SECURITY TO THE
MANNER OF SUCH TRANSFER AND SUBMIT SUCH CERTIFIED SECURITY TO THE
TRUSTEE. IF ANY PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FORM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR APPLICABLE SECURITIES LAWS OF ANY JURISDICTION. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING
RESTRICTIONS."
2. Offering. The Initial Securities will be offered and sold to the
Initial Purchasers pursuant to an exemption from the registration requirements
under the Act. The Company has prepared a preliminary offering memorandum, dated
November 10, 1997 (the "Preliminary Offering Memorandum"), and a final offering
memorandum, dated November 24, 1997 (the "Offering Memorandum"), relating to the
Company, the Initial Securities and the Subsidiary Guarantees.
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers (the "Exempt Resales") of the Initial Securities on
the terms set forth in the Offering Memorandum, as amended or supplemented,
solely to (i) persons whom the Initial Purchasers reasonably believe to be
"qualified institutional buyers," as defined in Rule 144A under the Act ("QIBs")
and (ii) non-U.S. persons outside the United States in reliance upon Regulation
S ("Regulation S") under the Act (each, a "Reg S Investor"). The QIBs and Reg S
Investors are collectively referred to herein as the "Eligible Purchasers."
Holders (including subsequent transferees) of the Initial Securities
will have the registration rights set forth in the registration rights agreement
relating thereto (the "Registration Rights Agreement"), to be dated the Closing
Date, for so long as such Initial Securities constitute "Transfer Restricted
Securities" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company and the Guarantors will agree to file
with the Securities and Exchange Commission (the "Commission"), under the
circumstances set forth therein, (i) a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to the 11% Notes due 2004 (the
"Exchange Securities") identical in all material respects to the Initial
Securities (except that the Exchange Securities will not contain terms with
respect to transfer restrictions or Liquidated Damages) to be offered in
exchange for the Initial Securities (the "Exchange Offer") and (ii) under
certain circumstances, a shelf registration statement pursuant to Rule 415 under
the Act (the "Shelf
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Registration Statement" and, together with the Exchange Offer Registration
Statement, the "Registration Statements") relating to the resale by certain
holders of the Initial Securities, and to use their best efforts to cause such
Registration Statements to be declared effective and to consummate the
Exchange Offer. This Agreement, the Securities, the Subsidiary Guarantees,
the Indenture, the Registration Rights Agreement and the New Credit Facility (as
defined in the Offering Memorandum) are hereinafter referred to collectively as
the "Operative Documents."
3. Purchase, Sale and Delivery. (a) On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell to
each Initial Purchaser, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, the principal amount of Initial
Securities set forth opposite its name on Schedule I hereto. The purchase price
for the Initial Securities will be $970 per $1,000 principal amount of Initial
Securities.
(b) Delivery of the Initial Securities shall be made, against
payment of the purchase price therefor, at the offices of ▇▇▇▇, Weiss, Rifkind,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, New York, New York or such other location as may be mutually
acceptable. Such delivery and payment shall be made at 9:00 a.m., New York City
time, on December 1, 1997 or at such other time as shall be agreed upon by the
Initial Purchasers and the Company. The time and date of such delivery and
payment are herein called the "Closing Date."
(c) On the Closing Date, payment of the purchase price for the
Initial Securities shall be made to the Company by wire or book-entry transfer
of immediately available same-day funds to such account or accounts as the
Company shall specify prior to the Closing Date or by such other means as the
parties hereto shall agree prior to the Closing Date against delivery to the
Initial Purchasers of the certificates evidencing the Initial Securities. Upon
delivery, the Initial Securities shall be in global form, registered in such
names and in such denominations as the Initial Purchasers shall have requested
in writing not less than two full business days prior to the Closing Date. The
Company agrees to make copies of one or more global certificates evidencing the
Initial Securities available for inspection by the Initial Purchasers in New
York, New York at least 24 hours prior to the Closing Date.
4. Agreements of the Company and the Guarantors. The Company and the
Guarantors, jointly and severally, covenant and agree with the Initial
Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested
by the Initial Purchasers, confirm such advice in writing, (i) of the issuance
in any jurisdiction of any stop order suspending the qualification or exemption
from qualification of any Securities for offering or sale in any jurisdiction,
or the initiation of any proceeding for such purpose by any state securities
commission or other regulatory authority in any jurisdiction and (ii) of the
happening of any event that makes any statement of a material fact made in the
Preliminary Offering Memorandum or the Offering Memorandum untrue or that
requires the making of any
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additions to or changes in the Preliminary Offering Memorandum or the Offering
Memorandum in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. The Company and the
Guarantors shall use commercially reasonable efforts to prevent the issuance of
any stop order or order suspending the qualification or exemption of any
Securities under any securities or Blue Sky laws and, if at any time any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption of any Securities or Subsidiary
Guarantees of Securities under any securities or Blue Sky laws, the Company and
the Guarantors shall use commercially reasonable efforts to obtain the
withdrawal or lifting of such order at the earliest practicable time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company, without charge, as many
copies of the Preliminary Offering Memorandum and the Offering Memorandum,
including all documents incorporated therein by reference, and any amendments or
supplements thereto, as the Initial Purchasers may reasonably request. The
Company and the Guarantors consent to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum prior to the Closing Date unless the
Initial Purchasers shall previously have been advised thereof and shall not have
reasonably objected thereto within a reasonable time after being furnished a
copy thereof. The Company and the Guarantors shall promptly prepare, upon the
Initial Purchasers' reasonable request, any amendment or supplement to the
Preliminary Offering Memorandum or the Offering Memorandum that the Initial
Purchasers or the Company believe may be necessary or advisable in connection
with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any
Exempt Resale, any event shall occur as a result of which, in the judgment of
the Company and the Guarantors based on the advice of counsel for the Company
and the Guarantors or the Initial Purchasers or counsel for the Initial
Purchasers, it becomes necessary or advisable to amend or supplement the
Preliminary Offering Memorandum or Offering Memorandum in order to make the
statements therein, in the light of the circumstances when such Offering
Memorandum is delivered to an Eligible Purchaser which is a prospective
purchaser, not misleading, or if it is necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or Offering Memorandum to comply
with applicable law, (i) to notify the Initial Purchasers and (ii) forthwith to
prepare an appropriate amendment or supplement to such Preliminary Offering
Memorandum or Offering Memorandum so that the statements therein as so amended
or supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that such Preliminary Offering Memorandum or
Offering Memorandum will comply with applicable law.
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(e) To cooperate with the Initial Purchasers and counsel for the
Initial Purchasers in connection with the qualification or registration of the
Initial Securities under the securities or Blue Sky laws of such jurisdictions
as the Initial Purchasers may reasonably request and to continue such
qualification in effect so long as required for the Exempt Resales; provided,
however, that none of the Company or the Guarantors shall be required in
connection therewith to register or qualify as a foreign corporation where it is
not now so qualified or to take any action that would subject it to service of
process in suits or taxation, in each case, other than as to matters and
transactions relating to the Preliminary Offering Memorandum, the Offering
Memorandum or Exempt Resales, in any jurisdiction where it is not now so
subject.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
to pay all costs, expenses, fees and taxes incident to the performance of the
obligations of the Company and the Guarantors hereunder, including in connection
with: (i) the preparation, printing, filing and distribution of the Preliminary
Offering Memorandum and the Offering Memorandum (including, without limitation,
financial statements) and all amendments and supplements thereto required
pursuant hereto, (ii) the preparation (including, without limitation,
duplication costs) and delivery of all agreements, correspondence and all other
documents prepared and delivered in connection herewith and with the Exempt
Resales, (iii) the issuance, transfer and delivery of the Securities and the
Subsidiary Guarantees to the Initial Purchasers, (iv) the qualification or
registration of the Securities and the Subsidiary Guarantees for offer and sale
under the securities or Blue Sky laws of the several states (including, without
limitation, the cost of printing and mailing a preliminary and final Blue Sky
Memorandum and the reasonable fees and disbursements of counsel for the Initial
Purchasers relating thereto), (v) furnishing such copies of the Preliminary
Offering Memorandum and the Offering Memorandum, and all amendments and
supplements thereto, as may be requested for use in connection with Exempt
Resales, (vi) the preparation of certificates for the Securities and the
Subsidiary Guarantees (including, without limitation, printing and engraving
thereof), (vii) the fees, disbursements and expenses of the Company's and the
Guarantors' counsel and accountants, (viii) all fees and expenses (including
fees and expenses of counsel) of the Company in connection with the approval of
the Securities by DTC for "book-entry" transfer, (ix) rating the Securities by
rating agencies, (x) the reasonable fees and expenses of the Trustee and its
counsel, (xi) the performance by the Company and the Guarantors of their other
obligations under this Agreement and the other Operative Documents and (xii)
"roadshow" travel and other expenses incurred in connection with the marketing
and sale of the Securities.
(g) To use the proceeds from the sale of the Initial Securities
in the manner described in the Offering Memorandum under the caption "Use of
Proceeds."
(h) Not to voluntarily claim, and to resist actively any attempts
to claim, the benefit of any usury laws against the holders of any Securities.
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(i) To do and perform all things required to be done and
performed under this Agreement by them prior to or after the Closing Date and to
use its best efforts to satisfy all conditions precedent within their reasonable
control to the delivery of the Initial Securities and the Subsidiary Guarantees.
(j) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Initial Securities in a manner that
would require the registration under the Act of the sale to the Initial
Purchasers or the Eligible Purchasers of the Initial Securities or to take any
other action that would result in the Exempt Resales not being exempt from
registration under the Act.
(k) For so long as any of the Securities remain outstanding and
during any period in which the Company and the Guarantors are not subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to make available to any holder or beneficial owner of Initial
Securities in connection with any sale thereof and any prospective purchaser of
such Securities from such holder or beneficial owner, the information required
by Rule 144A(d)(4) under the Act.
(l) To file an Exchange Offer Registration Statement and to use
its best efforts to have the Exchange Offer Registration Statement declared
effective, in accordance with and subject to the terms set forth in the
Registration Rights Agreement, to permit registered Exchange Securities to be
offered in exchange for the Initial Securities and to comply with all applicable
federal and state securities laws in connection with the Exchange Offer.
(m) To comply in all material respects with all of their
agreements set forth in the Registration Rights Agreement and all agreements set
forth in the representation letters of the Company to DTC relating to the
approval of the Securities by DTC for "book-entry" transfer.
(n) To effect the inclusion of the Securities in PORTAL and to
obtain approval of the Initial Securities by DTC for "book-entry" transfer.
(o) During a period of two years following the Closing Date, to
deliver without charge to the Initial Purchasers, as they may reasonably
request, promptly upon their becoming available, copies of (i) all reports or
other publicly available information that the Company shall mail or otherwise
make available to its securityholders and (ii) all reports, financial statements
and proxy or information statements filed by the Company with the Commission or
any national securities exchange and such other publicly available information
concerning the Company or any of its subsidiaries, including without limitation,
press releases.
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(p) Prior to the Closing Date, to furnish to the Initial
Purchasers, as soon as they have been prepared in the ordinary course by the
Company and each Guarantor, copies of any unaudited interim financial statements
for any period subsequent to the periods covered by the financial statements
appearing in the Offering Memorandum.
(q) Not to take, directly or indirectly, and not to permit any of
the Company's subsidiaries to take, directly or indirectly, any action designed
to, or that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company or any of the
Guarantors to facilitate the sale or resale of the Securities. Except as
permitted by the Act, none of the Company or the Guarantors will distribute any
(i) preliminary offering memorandum, including, without limitation, the
Preliminary Offering Memorandum, (ii) offering memorandum, including, without
limitation, the Offering Memorandum, or (iii) other offering material in
connection with the offering and sale of the Securities.
(r) For a period of 180 days from the date of the Offering
Memorandum, not to offer for sale, sell, contract to sell or otherwise dispose
of, directly or indirectly, or file a registration statement for, or announce
any offer, sale, contract for sale of or other disposition of any debt
securities issued or guaranteed by the Company or any of its subsidiaries (other
than the Initial Securities or Exchange Securities; it being understood that,
for the purposes of this Section 4(s), the term debt securities does not include
indebtedness incurred pursuant to the New Credit Facility or indebtedness
incurred under any other term, revolving credit or bank facility provided by
banks or bank syndicates) without the prior written consent of the Initial
Purchasers.
(s) To use its best efforts to do and perform all things required
or necessary to be done and performed under this Agreement prior to the Closing
Date and to satisfy all conditions precedent to the delivery of the Initial
Securities and the Subsidiary Guarantees.
(t) To use their best efforts to cause Physicians Home Health
Network, Inc., a Missouri corporation, to redomesticate to either Delaware,
Texas or another jurisdiction reasonably acceptable to the Initial Purchasers
(including without limitation through merger with an existing Subsidiary), on or
prior to the Closing Date or as soon thereafter as reasonably practicable.
5. Representations and Warranties. (a) The Company and the Guarantors,
jointly and severally, represent and warrant to the Initial Purchasers that:
(i) The Preliminary Offering Memorandum as of its date does not, and
the Offering Memorandum as of its date and as of the Closing Date does not
and will not, and any supplement or amendment to them will not, contain any
untrue statement of a
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material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties contained
in this paragraph shall not apply to statements in or omissions from
the Preliminary Offering Memorandum and the Offering Memorandum (or
any supplement or amendment thereto) made in reliance upon and in
conformity with information relating to either Initial Purchaser
furnished to the Company in writing by such Initial Purchaser
expressly for use therein. No stop order preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum, or any
amendment or supplement thereto, or any order asserting that any of
the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(ii) (A) Any documents incorporated by reference in the Offering
Memorandum, when they became effective or were filed with the
Commission, as the case may be, did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(B) any documents incorporated by reference in the Offering Memorandum
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Exchange Act; and (C) any further documents so filed and
incorporated by reference in the Offering Memorandum or any further
amendment or supplement hereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Exchange Act.
(iii) Each of the Company and the Guarantors (A) has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, (B) has all
requisite corporate power and authority to carry on its business as it
is currently being conducted and as described in the Offering
Memorandum and to own, lease and operate its properties, and (C) is
duly qualified and in good standing as a foreign corporation,
authorized to do business in each jurisdiction in which the nature of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified could not
reasonably be expected to (x) result, individually or in the
aggregate, in a material adverse effect on the properties, prospects,
business, results of operations or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole, (y) interfere
with or adversely affect the issuance of the Securities or the
issuance of the Subsidiary Guarantees pursuant hereto or (z) in any
manner draw into question the validity of this Agreement or any other
Operative Document (any of the events set forth in clauses (x), (y) or
(z), a "Material Adverse Effect").
(iv) The Company has no subsidiaries other than the Guarantors.
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(v) All of the issued and outstanding shares of capital stock of
each subsidiary of the Company is owned by the Company, free and clear
of any security interest, claim, lien, limitation on voting rights or
encumbrance, except for any such security interest, claim, restriction
on transfer, lien, limitation on voting rights or encumbrance pursuant
to the Existing Credit Facility (which shall be terminated on the
Closing Date) and the New Credit Facility; and all such securities
have been duly authorized, validly issued, and are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights.
(vi) Except as set forth in the Offering Memorandum, there are
not currently any outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire, or instruments convertible
into or exchangeable for, any capital stock or other equity interest
of the Company or any of its subsidiaries.
(vii) When the Initial Securities and the Subsidiary Guarantees
are issued and delivered pursuant to this Agreement, no Initial
Security or Subsidiary Guarantee will be of the same class (within the
meaning of Rule 144A under the Act) as securities of the Company or of
any of the Guarantors that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are
quoted in a United States automated inter-dealer quotation system.
(viii) Each of the Company and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and each of the other Operative
Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby, including, without limitation, the
corporate power and authority to issue, sell and deliver the
Securities and to issue and deliver the Subsidiary Guarantees as
provided herein and therein.
(ix) This Agreement has been duly and validly authorized,
executed and delivered by each of the Company and the Guarantors and
(assuming the due authorization, execution and delivery of this
Agreement by the Initial Purchasers) is the legal, valid and binding
agreement of each of the Company and the Guarantors, enforceable
against each of them in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity, regardless of
whether such enforcement is sought in a proceeding in equity or at
law.
(x) The Indenture has been duly and validly authorized by each of
the Company and the Guarantors and, when duly executed and delivered
by each of the Company and the Guarantors, will be the legal, valid
and binding obligation of each of the Company and the Guarantors,
enforceable against each of them in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles
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of equity. On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder. The Offering Memorandum contains a summary of
the terms of the Indenture, which is accurate in all material
respects.
(xi) The Registration Rights Agreement has been duly and validly
authorized by each of the Company and the Guarantors and, when duly
executed and delivered by each of the Company and the Guarantors, will
be the legal, valid and binding obligation of each of the Company and
the Guarantors, enforceable against each of them in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity. The
Offering Memorandum contains a summary of the terms of the
Registration Rights Agreement, which is accurate and complete in all
material respects.
(xii) The New Credit Facility has been duly and validly
authorized by each of the Company and its subsidiaries party thereto
and, when duly executed and delivered by each of the Company and such
subsidiaries, will be the legal, valid and binding obligation of each
of the Company and such subsidiaries, enforceable against each of them
in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity. The Offering Memorandum contains a summary of
the terms of the New Credit Facility, which is accurate and complete
in all material respects.
(xiii) The Initial Securities have been duly and validly
authorized by the Company for issuance and sale to the Initial
Purchasers pursuant to this Agreement and, when issued and
authenticated in accordance with the terms of the Indenture and
delivered against payment therefor in accordance with the terms hereof
and thereof, will be the legal, valid and binding obligations of the
Company, enforceable against it in accordance with their terms and
entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject
to general principles of equity. The Offering Memorandum contains a
summary of the terms of the Securities, which is accurate and complete
in all material respects.
(xiv) The Exchange Securities have been duly and validly
authorized for issuance by the Company and, when issued and
authenticated in accordance with the terms of the Exchange Offer and
the Indenture, will be the legal, valid and binding obligations of the
Company, enforceable against it in accordance with their terms and
entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors
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generally and subject to general principles of equity.
(xv) The Subsidiary Guarantees of the Initial Securities have
been duly and validly authorized by each of the Guarantors and, when
executed and delivered in accordance with the terms of the Indenture
and when the Initial Securities have been issued and authenticated in
accordance with the terms of the Indenture and delivered against
payment therefor in accordance with the terms hereof and thereof, will
be the legal, valid and binding obligations of each of the Guarantors,
enforceable against each of them in accordance with their terms and
entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject
to general principles of equity. The Offering Memorandum contains a
summary of the terms of the Subsidiary Guarantees, which is accurate
in all material respects.
(xvi) The Subsidiary Guarantees of the Exchange Securities have
been duly and validly authorized by each of the Guarantors and, when
executed and delivered in accordance with the terms of the Indenture
and when the Exchange Securities have been issued and authenticated in
accordance with the terms of the Exchange Offer and the Indenture,
will be the legal, valid and binding obligations of each of the
Guarantors, enforceable against each of them in accordance with their
terms and entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
(xvii) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources which the
Company believes to be reliable and accurate in all material respects.
(xviii) Each of the Company and its subsidiaries is not and,
after giving effect to the Offering, will not be, (A) in violation of
its charter or bylaws, (B) in default in the performance of any bond,
debenture, note, indenture, mortgage, deed of trust or other agreement
or instrument to which it is a party or by which it is bound or to
which any of its properties is subject, which singly or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect, except as disclosed in the Offering Memorandum, or (C) in
violation of any local, state, federal or foreign law, statute,
ordinance, rule, regulation, requirement, judgment or court decree
(including, without limitation, environmental laws, statutes,
ordinances, rules, regulations, judgments or court decrees) applicable
to it or any of its subsidiaries or any of its or their assets or
properties (whether owned or leased), which singly or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect, except as disclosed in the Offering Memorandum. To the best
knowledge of the Company and the Guarantors after reasonable inquiry,
there exists no condition that, with notice, the passage of time or
both, would constitute a default under any such document or instrument
except for
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any such default that could not, individually or in the aggregate
with other defaults, reasonably be expected to have a Material Adverse
Effect.
(xix) None of (A) the execution, delivery or performance by the
Company or any of the Guarantors of this Agreement or any of the other
Operative Documents to which it is a party and (B) the issuance and
sale of the Securities and the issuance of the Subsidiary Guarantees,
violates, conflicts with or constitutes a breach of any of the terms
or provisions of, or a default under (or an event that with notice or
the lapse of time, or both, would constitute a default), or require
consent under, or result in the imposition of a lien or encumbrance on
any properties of the Company or any of its subsidiaries, or an
acceleration of any indebtedness of the Company or any of its
subsidiaries pursuant to, (1) the charter or bylaws of the Company or
any of its subsidiaries, (2) any bond, debenture, note, indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which any of them
or their property is or may be bound, (3) any statute, rule or
regulation applicable to the Company or any of its subsidiaries or any
of their assets or properties or (4) any judgment, order or decree of
any court or governmental agency or authority having jurisdiction over
the Company or any of its subsidiaries or any of their assets or
properties, except in each case, in the case of clauses (2), (3) and
(4), for those violations, defaults, consents, impositions of liens or
acceleration that could not reasonably be expected to have a Material
Adverse Effect. Except as may be required under applicable state
securities or Blue Sky laws, and except for the filing of registration
statements under the Act, and any other requirements of the Act or
Exchange Act applicable in connection with the transactions
contemplated by the Registration Rights Agreement, and qualification
of the Indenture under the Trust Indenture Act in connection with the
Registration Rights Agreement, no consent, approval, authorization or
order of, or filing, registration, qualification, license or permit of
or with, (A) any court or governmental agency, body or administrative
agency or (B) any other person is required for (1) the execution,
delivery and performance by the Company or any of the Guarantors of
this Agreement or any of the other Operative Documents to which it is
a party or (2) the issuance and sale of the Securities and the
issuance of the Subsidiary Guarantees and the transactions
contemplated hereby and thereby, except such as have been or will be
obtained and made on or prior to the Closing Date (or, in the case of
the Registration Rights Agreement, will be obtained and made under the
Act, the Trust Indenture Act, and state securities or Blue Sky laws
and regulations).
(xx) There is (A) no action, suit, investigation or proceeding
before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending or, to the best knowledge
of the Company and the Guarantors, after reasonable inquiry,
threatened or contemplated to which the Company or any of its
subsidiaries is or may be a party or to which the business or property
of the Company or any of its subsidiaries is or may be subject, (B) no
statute, rule, regulation or order that has been
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enacted, adopted or issued by any governmental agency or, to the
knowledge of the Company, that has been proposed by any governmental
body and (C) no injunction, restraining order or order of any nature
by a federal or state court or foreign court of competent jurisdiction
to which the Company or any of its subsidiaries is or may be subject
or to which the business, assets or property of the Company or any of
its subsidiaries is or may be subject, that, in the case of clauses
(A), (B) and (C) above, is required to be disclosed in the Preliminary
Offering Memorandum and the Offering Memorandum and that is not so
disclosed or (2) could reasonably be expected to result in a Material
Adverse Effect.
(xxi) No action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental
agency that prevents or suspends the issuance or sale of the
Securities or the Subsidiary Guarantees or prevents or suspends the
use of the Offering Memorandum; no injunction, restraining order or
order of any nature by a federal or state court of competent
jurisdiction has been issued that prevents the issuance of the
Securities or the Subsidiary Guarantees or prevents or suspends the
sale of the Securities in any jurisdiction referred to in Section 4(e)
hereof; and every request of any securities authority or agency of any
jurisdiction for additional information has been complied with in all
material respects.
(xxii) The Company has delivered to the Initial Purchasers true
and correct copies of all documents and agreements related to the New
Credit Facility, including all amendments, alterations, modifications
or waivers thereto and all exhibits or schedules thereto.
(xxiii) There is (A) no unfair labor practice complaint pending
against the Company or any of its subsidiaries nor, to the best
knowledge of the Company and the Guarantors, after reasonable inquiry,
threatened against any of them, before the National Labor Relations
Board, any state or local labor relations board or any foreign labor
relations board, and no grievance or arbitration proceeding arising
out of or under any collective bargaining agreement is so pending
against the Company or any of its subsidiaries or, to the best
knowledge of the Company and the Guarantors, after reasonable inquiry,
threatened against any of them, (B) no strike, labor dispute, slowdown
or stoppage pending against the Company or any of its subsidiaries
nor, to the best knowledge of the Company and the Guarantors, after
reasonable inquiry, threatened against the Company or any of its
subsidiaries and (C) to the best knowledge of the Company and the
Guarantors, no union representation question existing with respect to
the employees of the Company or any of its subsidiaries, except for
those complaints, grievances, arbitration proceedings, strikes, labor
disputes slowdowns, stoppages or representation questions, as
applicable, that could not reasonably be expected to have a Material
Adverse Effect. To the best knowledge of the Company and the
Guarantors, no collective bargaining organizing activities are taking
place with respect to the Company or any of its subsidiaries. None of
the Company or any of its
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subsidiaries has violated (A) any federal, state or local law or
foreign law relating to discrimination in hiring, promotion or pay of
employees, (B) any applicable wage or hour laws or (C) any provision
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the rules and regulations thereunder, except in each
case for those violations that could not reasonably be expected to
have a Material Adverse Effect.
(xxiv) None of the Company or any of its subsidiaries has
violated any foreign, federal, state or local law or regulation
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws") which could reasonably be expected to have a
Material Adverse Effect.
(xxv) There is no alleged liability, or to the best knowledge of
the Company and the Guarantors, potential liability (including,
without limitation, alleged or potential liability or investigatory
costs, cleanup costs, governmental response costs, natural resource
damages, property damages, personal injuries or penalties) of the
Company or any of its subsidiaries arising out of, based on or
resulting from (a) the presence or release into the environment of
any Hazardous Material (as defined) at any location, whether or not
owned by the Company or such subsidiary, as the case may be, or (b)
any violation or alleged violation of any Environmental Law, which
alleged or potential liability is required to be disclosed in the
Offering Memorandum, other than as disclosed therein, or could not
reasonably be expected to have a Material Adverse Effect. The term
"Hazardous Material" means (i) any "hazardous substance" as defined
by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, (ii) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act, as amended,
(iii) any petroleum or petroleum product, (iv) any polychlorinated
biphenyl, and (v) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material, waste or substance regulated
under or within the meaning of any other law relating to protection
of human health or the environment or imposing liability or standards
of conduct concerning any such chemical material, waste or substance.
(xxvi) Except as disclosed in the Offering Memorandum, the
Company and its subsidiaries has such permits, licenses, franchises
and authorizations of governmental or regulatory authorities
("permits"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate
their respective properties and to conduct their businesses except
where the failure to have such permits could not reasonably be
expected to result in a Material Adverse Effect; each of the Company
and its subsidiaries has fulfilled and performed all of its
obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other impairment of the
rights of the holder of any such permit, and, except as
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17
disclosed in the Offering Memorandum, except where the failure to
fulfill or perform its obligations or the occurrence of such event, as
applicable, could not reasonably be expected to have a Material
Adverse Effect.
(xxvii) Each of the Company and its subsidiaries has (A) good and
indefeasible title to all of the properties and assets material to the
business of the Company and its subsidiaries taken as a whole as owned
by it, free and clear of all liens, charges, encumbrances and
restrictions (except for Permitted Liens (as defined in the Indenture)
and taxes not yet payable), (B) peaceful and undisturbed possession
under all material leases to which any of them is a party as lessee
and each of which lease is valid and binding and no default exists
thereunder, except for defaults that could not reasonably be expected
to have a Material Adverse Effect, (C) all licenses, certificates,
permits, authorizations, approvals, franchises and other rights from,
and has made all declarations and filings with, all federal, state and
local authorities, all self-regulatory authorities and all courts and
other tribunals (each, an "Authorization") necessary to engage in the
business conducted by any of them in the manner described in the
Offering Memorandum, except where the failure to have such
Authorization could not reasonably be expected to have a Material
Adverse Effect and (D) no reason to believe that any governmental
body or agency is considering limiting, suspending or revoking any
such Authorization, except where such limitation, suspension or
revocation could not reasonably be expected to have a Material
Adverse Effect. All such Authorizations are valid and in full force
and effect and each of the Company and its subsidiaries is in
compliance in all respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto, except where
the failure to comply could not reasonably be expected to have a
Material Adverse Effect. All material leases to which the Company or
any of its subsidiaries is a party are valid and binding and no
default by the Company or such subsidiary, as the case may be, has
occurred and is continuing thereunder and, to the best knowledge of
the Company and the Guarantors, no material defaults by the landlord
are existing under any such lease, except as could not reasonably be
expected to have a Material Adverse Effect.
(xxviii) Each of the Company and its subsidiaries owns, possesses
or has the right on either an exclusive or non-exclusive basis to use
all patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, software, systems or
procedures), trademarks, service marks and trade names, inventions,
computer programs, technical data and information (collectively, the
"Intellectual Property") presently employed by it in connection with
the businesses now operated by it or that are proposed to be operated
by it free and clear of and without violating any right, claimed
right, charge, encumbrance, pledge, security interest, restriction or
lien of any kind of any other person, except for any rights, claimed
rights, charges, encumbrances, pledges, security interests,
restrictions or liens that could not reasonably
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be expected to have a Material Adverse Effect, and none of the
Company or any of its subsidiaries has received any written notice of
infringement of or conflict with asserted rights of others with
respect to any of the foregoing. The use of the Intellectual Property
in connection with the business and operations of the Company or any
of its subsidiaries does not infringe on the rights of any person,
except as could not reasonably be expected to have a Material Adverse
Effect.
(xxix) All federal tax returns and other material tax returns
required to be filed by the Company or any of its subsidiaries in all
jurisdictions have been so filed. All taxes, including withholding
taxes, penalties and interest, assessments, fees and other charges due
or claimed to be due from such entities or that are due and payable
have been paid, other than those being contested in good faith and for
which adequate reserves have been provided or those currently payable
without penalty or interest. To the knowledge of the Company and the
Guarantors after reasonable inquiry, there are no proposed additional
tax assessments against the Company or any of its subsidiaries which
could reasonably be expected to, if the assessments were made, have a
Material Adverse Effect, or against the assets or property of the
Company or any of its subsidiaries, except those tax assessments for
which adequate reserves have been established.
(xxx) None of the Company or any of its subsidiaries is an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(xxxi) There are no holders of securities of the Company or any
of its subsidiaries who, by reason of the execution by the Company and
the Guarantors of this Agreement or any other Operative Document or
the consummation by the Company and the Guarantors of the transactions
contemplated hereby and thereby, have the right to request or demand
that the Company or any of its subsidiaries register under the Act or
analogous foreign laws and regulations securities held by them.
(xxxii) Each of the Company and its subsidiaries maintains a
system of internal accounting controls sufficient to provide
reasonable assurance that: (A) material transactions are executed in
accordance with management's general or specific authorizations; (B)
material transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C)
access to material assets is permitted only in accordance with
management's general or specific authorization; (D) the recorded
accountability for material assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect thereto; and (E) material liabilities and accruals are
properly recognized.
(xxxiii) Each of the Company and its subsidiaries maintains, or
the Company
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maintains on behalf of each of its subsidiaries, insurance covering
its material properties, operations, personnel and businesses. To the
best of the Company's knowledge, such insurance insures against such
losses and risks as are adequate in accordance with industry practice
to protect the Company and its subsidiaries and their respective
businesses. None of the Company or any of its subsidiaries has
received notice from any insurer or agent of such insurer that
substantial capital improvements or other material expenditures will
have to be made in order to continue such insurance.
(xxxiv) None of the Company or any of its subsidiaries has (A)
taken, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company or any of its
subsidiaries to facilitate the sale or resale of the Securities or (B)
since the date of the Preliminary Offering Memorandum (1) sold, bid
for, purchased or paid any person any compensation for soliciting
purchases of the Securities or (2) paid or agreed to pay to any person
any compensation for soliciting another to purchase any other
securities of the Company or any of its subsidiaries.
(xxxv) No registration under the Act of the Initial Securities is
required for the sale of the Initial Securities to the Initial
Purchasers as contemplated hereby or for the Exempt Resales assuming
(A) that the Notes are sold to the Initial Purchasers, and initially
resold by the Initial Purchasers, in accordance with the terms of, and
in the manner contemplated by, the Purchase Agreement and the Final
Memorandum, (B) (1) that the purchasers who buy such Notes in the
initial resale thereof are QIBs or (2) that the offer or sale of the
Notes is made in an offshore transaction as defined in Regulation S,
(C) the accuracy of the Initial Purchasers' representations in Section
8 of the Purchase Agreement and those of the Company contained in the
Purchase Agreement regarding the absence of a general solicitation in
connection with the sale of such Notes to the Initial Purchasers and
the initial resale thereof, (D) the due performance by the Initial
Purchasers of the covenants and agreements set forth in the Purchase
Agreement, (E) the Initial Purchasers' compliance with the offering
and transfer procedures and restrictions described in the Final
Memorandum and (F) the accuracy of the representations and warranties
deemed to have been made in accordance with the Purchase Agreement and
the Final Memorandum by purchasers to whom the Initial Purchasers
initially resell the Notes.
(xxxvi) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Initial Securities to be
purchased by Eligible Purchasers will not involve any prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975
of the Internal Revenue Code of 1986. The representation made by the
Company and the Guarantors in the preceding sentence is made in
reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by Eligible
Purchasers as set forth in the Offering Memorandum under the caption
"Notice to Investors."
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(xxxvii) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, and each amendment or supplement
thereto, as of its date, contains the information specified in, and
meets the requirements of, Rule 144A(d)(4) under the Act.
(xxxviii) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the
Trust Indenture Act.
(xxxix) None of the Company, the Guarantors or any of their
respective affiliates or any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Company and the
Guarantors make no representation) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S with
respect to the Initial Securities or the Subsidiary Guarantees.
(xl) The Initial Securities offered and sold in reliance on
Regulation S have been and will be offered and sold only in offshore
transactions.
(xli) The sale of the Initial Securities pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions
of the Act.
(xlii) The Company, the Guarantors and their respective
affiliates and all persons acting on their behalf (other than the
Initial Purchasers, as to whom the Company and the Guarantors make no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the
offering of the Initial Securities outside the United States and, in
connection therewith, the Preliminary Offering Memorandum and the
Offering Memorandum contains or will contain the disclosure required
by Rule 902(h).
(xliii) Subsequent to the respective dates as of which
information is given in the Offering Memorandum and up to the Closing
Date, except as set forth in the Offering Memorandum, (A) none of the
Company or any of its subsidiaries has incurred any liabilities or
obligations, direct or contingent, which are material, individually or
in the aggregate, to the Company and its subsidiaries, taken as a
whole, nor entered into any transaction not in the ordinary course of
business, (B) there has not been any change or development which could
reasonably be expected to result in a Material Adverse Effect and (C)
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(xliv) None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Securities, the issuance of
the Subsidiary Guarantees, the application of the proceeds from the
issuance and sale of the Securities and the consummation of the
transactions contemplated thereby as set forth in the Offering
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Memorandum, will violate Regulations G, T, U or X promulgated by the
Board of Governors of the Federal Reserve System or analogous foreign
laws and regulations.
(xlv) The accountants who have issued a report on the financial
statements included or to be included as part of the Offering
Memorandum are independent accountants as required by the Act. The
historical financial statements of the Company included in the
Preliminary Offering Memorandum and the Offering Memorandum, together
with related schedules and notes thereto, comply as to form in all
material respects with the requirements applicable to registration
statements on Form S-1 under the Act and will present fairly the
financial position and results of operations of the Company and its
subsidiaries, at the dates and for the periods indicated. Such
financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods presented except as indicated in the notes
thereto. The pro forma financial statements included in the Offering
Memorandum have been prepared on a basis consistent with such
historical statements of the Company, except for the pro forma
adjustments specified therein, and give effect to assumptions made on
a reasonable basis and present fairly in all material respects the
historical and proposed transactions contemplated by this Agreement
and the Operative Documents and comply as to form in all material
respects with the requirements applicable to pro forma financial
statements included in registration statements on Form S-1 under the
Act, except as expressly stated therein. The other financial and
statistical information and data included in the Offering Memorandum
derived from the historical and pro forma financial statements are
accurately presented in all material respects and prepared on a basis
consistent with the financial statements, historical and pro forma,
included in the Offering Memorandum and the books and records of the
Company and its subsidiaries.
(xlvi) In connection with the issuance of the Notes, none of the
Company or any of the Guarantors intends to, nor does it believe that
it will, incur debts beyond its ability to pay such debts as they
mature. After giving effect to the transactions contemplated by the
Offering Memorandum, the present fair market value of the assets of
each of the Company and the Guarantors exceeds the amount that will be
required to be paid on or in respect of its existing debts and other
liabilities (including contingent liabilities) when and as they become
absolute and matured. After giving effect to such transactions the
assets of each of the Company and the Guarantors do not constitute
unreasonably small capital to carry out its business as conducted or
as proposed to be conducted. Upon the issuance of the Securities, the
present fair saleable value of the assets of each of the Company and
the Guarantors will exceed the amount that will be required to be paid
on or in respect of its existing debts and other liabilities
(including contingent liabilities) as they become absolute and
matured. Upon the issuance of the Securities, the assets of each of
the Company and the Guarantors will not constitute unreasonably small
capital to carry out its business as now conducted, including the
capital needs of each of the Company and the Guarantors, taking into
account
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the projected capital requirements and capital availability.
(xlvii) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between or among the Company
and its subsidiaries and any other person that would reasonably be
expected to give rise to a valid claim against the Company or any of
its subsidiaries or the Initial Purchasers for a brokerage commission,
finder's fee or like payment in connection with the issuance, purchase
and sale of the Securities or the issuance of the Subsidiary
Guarantees.
(xlviii) There exist no conditions that would constitute a
default by the Company or any of its subsidiaries (or an event which
with notice or the lapse of time, or both, would constitute a default)
under any of the Operative Documents.
(xlix) Except as described in the Offering Memorandum there
exists no relationship, direct or indirect, between or among the
Company or any of its subsidiaries, on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Company, any of its subsidiaries, on the other hand, of a kind
described in Item 404 of ▇▇▇▇▇▇▇▇▇▇ ▇-▇, ▇▇ ▇▇▇ 229.404.
(l) Neither the Company nor any of its subsidiaries nor any
employee or agent of the Company or its subsidiaries has made any
payment of funds of the Company or any of its subsidiaries or received
or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character
required to be disclosed in the Offering Memorandum.
(li) The Company and each subsidiary that is participating in the
Medicare or Medicaid programs, upon consummation of the transactions
contemplated by this Agreement, has the requisite provider agreement,
provider number or other authorization to ▇▇▇▇ the Medicare program
and the Medicaid programs in the state or states in which it provides
services. There is no action threatened or pending which could
reasonably be expected to result in a revocation of any such provider
number or authorization or the exclusion of the Company or any of its
subsidiaries from the Medicare program or any state Medicaid program.
None of the Company or any of its subsidiaries is subject to
settlements or other adjustments by third party payors (including
Medicare and Medicaid) which could reasonably be expected to have a
Material Adverse Effect.
(lii) The statements regarding regulation of the Company and its
subsidiaries under the captions "Business -- Regulation," "Risk
Factors -- Dependence on Reimbursement by Third-Party Payors," "--
Medicare Reimbursement Reforms," "-- Effect of Government Regulations"
and "-- Operation Restore Trust" (collectively, the "Regulatory
Sections") in the Offering Memorandum are correct in all material
respects and fairly describe the applicability of regulations to the
operations of the Company and
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its subsidiaries as described in the Offering Memorandum. The
statements regarding regulation of the Company and its subsidiaries in
the Regulatory Sections in the Offering Memorandum do not contain any
untrue statement of a material fact, or omit a material fact,
necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(liii) Each certificate signed by any officer of the Company or
any of the Guarantors and delivered to the Initial Purchasers or
counsel for the Initial Purchasers pursuant to this Agreement shall be
deemed to be a representation and warranty by the Company or such
Guarantor, as the case may be, to the Initial Purchasers as to the
matters covered thereby.
The Company and the Guarantors acknowledge that the Initial
Purchasers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 8 hereof, counsel for the Company and the
Guarantors and counsel for the Initial Purchasers, will rely upon the accuracy
and truth of the foregoing representations and hereby consent to such reliance.
(b) Each of the Initial Purchasers, severally but not jointly,
represents and warrants to the Company and the Guarantors that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order
to evaluate the merits and risks of an investment in the Initial
Securities.
(ii) Such Initial Purchaser (A) is not acquiring the Initial
Securities with a view to any distribution thereof that would violate
the Act or the securities laws of any state of the United States or
any other applicable jurisdiction and (B) will be reoffering and
reselling the Initial Securities only to QIBs in reliance on the
exemption from the registration requirements of the Act provided by
Rule 144A and non-U.S. persons in offers and sales that occur outside
the United States within the meaning of Regulation S under the Act.
(iii) No form of general solicitation or general advertising
(within the meaning of Regulation D under the Act) has been or will be
used in the United States by such Initial Purchaser or any of its
representatives or affiliates in connection with the offer, sale and
resale of any of the Initial Securities.
(iv) Each of the Initial Purchasers agrees that, in connection
with the Exempt Resales, it will solicit offers to buy the Initial
Securities only from, and will offer to sell the Initial Securities
only to, Eligible Purchasers. Each of the Initial Purchasers further
agrees that it will offer to sell the Initial Securities only to and
will solicit offers to buy only from (1) Eligible Purchasers that
acknowledge and agree (A) that such Initial
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Securities will not have been registered under the Act and that agree
to offer, sell, pledge or transfer such Initial Securities only
(x)(I) to a person whom the seller reasonably believes is a QIB
purchasing for its own account or for the account of a QIB in a
transaction meeting the requirements of Rule 144A, (II) in an offshore
transaction (as defined in Rule 902 under the Act) meeting the
requirements of Rule 904 under the Act, (III) in a transaction meeting
the requirements of Rule 144 under the Act, (IV) to an institutional
Accredited Investor (as defined in Rule 501(a)(1), (2), (3) or (7)
under the Act) that, prior to such transfer, furnishes the Trustee a
signed letter containing certain representations and agreements
relating to the restrictions on transfer of such Initial Securities
(the form of which letter can be obtained from the Trustee) or (V) in
accordance with another exemption from the registration requirements
of the Act (and based upon an opinion of counsel if the Company so
requests), (y) to the Company or any of its subsidiaries, (z) pursuant
to an effective registration statement under the Act and, in each
case, in accordance with any applicable securities laws of any state
of the United States or any other applicable jurisdiction and (B) that
the holder will, and each subsequent holder is required to, notify any
purchaser of the security evidenced thereby of the resale restrictions
set forth in (A) above.
(v) Such Initial Purchaser agrees that it has offered the Initial
Securities and will offer and sell the Initial Securities (A) as part
of its distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering of the Initial
Securities pursuant hereto and the Closing Date, only in accordance
with Rule 903 of Regulation S or another exemption from the
registration requirements of the Act. Such Initial Purchaser agrees
that, during such 40-day restricted period, it will not cause any
advertisement with respect to the Initial Securities (including any
"tombstone advertisement") to be published in any newspaper or
periodical or posted in any public place and will not issue any
circular relating to the Initial Securities, except such
advertisements as are permitted by and include the statements required
by Regulation S.
(vi) Such Initial Purchaser agrees that it has not offered or
sold and will not offer or sell the Initial Securities sold pursuant
hereto in reliance on Regulation S (A) as part of its distribution at
any time and (B) otherwise until 40 days after the later of the
commencement of the offering of the Initial Securities pursuant hereto
and the Closing Date, to a U.S. person (as defined in Rule 902 of the
Act) or for the account or benefit of a U.S. person (other than a
distributor (as defined in Rule 902 of the Act)).
(vii) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Initial Securities by it to any distributor,
dealer or person receiving a selling concession, fee or other
remuneration during the 40-day restricted period referred to in Rule
903(c)(2) under the Act, it will send to such distributor, dealer or
person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:
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"The Initial Securities covered hereby have not been
registered under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), and may not be offered and sold
within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of your distribution at
any time or (ii) otherwise until 40 days after the later of
the commencement of the offering and the Closing Date,
except in either case in accordance with Regulation S under
the Securities Act (or Rule 144A or to Accredited Investors
in transactions that are exempt from the registration
requirements of the Securities Act)."
(viii) Each Initial Purchaser represents, warrants and agrees
that (A) it has not offered or sold and prior to the expiration of six
months from the Closing Date will not offer or sell Securities to persons
in the United Kingdom, other than to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments
(whether as principal or agent) for the purposes of their businesses or
otherwise in circumstances which will not result in an offer to the public
within the meaning of the Public Offers of Securities Regulations 1995, (B)
it has complied and will comply with all applicable provisions of the
Public Offers of Securities Regulations and the Financial Services Act of
1986 with respect to anything done by it in relation to the Securities in,
from, or otherwise involving the United Kingdom, and (C) it has only issued
or passed on and will only issue or pass on, to any person in the United
Kingdom any documents received by it in connection with the issue of the
Securities if the person is of a kind described in Article 11(c) of the
Financial Services Act of 1986 (Investment Advertisements) (Exemptions)
Order 1995 or is a person to whom the documents may lawfully be issued or
passed on.
The Initial Purchasers understand that the Company and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 8 hereof, counsel for the Company and the Guarantors and counsel for the
Initial Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
6. Indemnification.
(a) The Company and the Guarantors, jointly and severally,
shall indemnify and hold harmless (i) each of the Initial Purchasers, (ii) each
person, if any, who controls either of the Initial Purchasers within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act and (iii) the
respective officers, directors, partners, employees, representatives and agents
of each of the Initial Purchasers or any controlling person, from and against
any and all losses, liabilities, claims, damages and expenses whatsoever as
incurred
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(including but not limited to reasonable attorneys' fees and any and all
reasonable expenses whatsoever incurred in investigating, preparing or defending
against any investigation or litigation, commenced or threatened, or any claim
whatsoever, and in enforcing this indemnification, and any and all amounts paid
in settlement of any claim or litigation) to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Preliminary Offering Memorandum or the
Offering Memorandum, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company and the Guarantors will not be
liable in any such case to the extent, but only to the extent, that any such
loss, liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with information
relating to either of the Initial Purchasers furnished to the Company in
writing by or on behalf of such Initial Purchaser expressly for use therein;
provided, further, that such indemnity with respect to the Preliminary
Offering Memorandum shall not inure to the benefit of either Initial Purchaser
(or any persons controlling such Initial Purchaser) from whom the person
asserting such loss, claim, damage or liability purchased the Securities which
are the subject thereof if such person did not receive a copy of the Offering
Memorandum (or the Offering Memorandum as amended or supplemented) at or prior
to the confirmation of the sale of such Securities to such person (and the
Offering Memorandum or any such amended or supplemented Offering Memorandum, as
applicable, shall have been delivered by the Company to such Initial Purchaser a
reasonable amount of time prior to the mailing or delivery, as applicable, of
such confirmation) and any such untrue statement or omission or alleged untrue
statement or omission of a material fact contained in such Preliminary Offering
Memorandum was corrected in the Offering Memorandum (or the Offering Memorandum
as amended or supplemented). This indemnity agreement will be in addition to any
liability which the Company and the Guarantors may otherwise have, including
under this Agreement.
(b) Each of the Initial Purchasers, severally and not jointly,
agrees to indemnify and hold harmless (i) the Company and the Guarantors, (ii)
each person, if any, who controls the Company and the Guarantors within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, and (iii)
the respective officers, directors, partners, employees, representatives and
agents of the Company and the Guarantors, against any losses, liabilities,
claims, damages and reasonable expenses whatsoever (including but not limited to
reasonable attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or litigation,
commenced or threatened, or any claim whatsoever and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement
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of a material fact contained in the Preliminary Offering Memorandum or the
Offering Memorandum, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with information
relating to such Initial Purchaser furnished to the Company in writing by or on
behalf of such Initial Purchaser expressly for use therein; provided, however,
that in no case shall either of the Initial Purchasers be liable or responsible
for any amount in excess of the discounts and commissions received by such
Initial Purchaser. This indemnity will be in addition to any liability which the
Initial Purchasers may otherwise have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 6). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action, (ii) the identifying parties
shall not have employed counsel to take charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional to
those available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense of
such action on behalf of the indemnifying party or parties), in any of which
events such fees and expenses of counsel shall be borne by the indemnifying
parties; provided, however, that the indemnifying party under subsection (a) or
(b) above shall only be liable for the legal expenses of one counsel (in
addition to any local counsel) for all indemnified parties in each jurisdiction
in which any claim or action is brought. Anything in this subsection to the
contrary notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its prior written consent,
provided that such consent was not unreasonably withheld. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which
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any indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party unless such settlement includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action.
7. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 is for any
reason held to be unavailable from any identifying party or is insufficient to
hold harmless a party indemnified thereunder, the Company and the Guarantors, on
the one hand, and each Initial Purchaser, on the other hand, shall contribute to
the aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting in the case of losses, claims, damages, liabilities and
expenses suffered by the Company and the Guarantors, any contribution received
by the Company and the Guarantors from persons, other than the Initial
Purchasers, who may also be liable for contribution, including persons who
control the Company and the Guarantors within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act) as incurred to which the Company, the
Guarantors and such Initial Purchaser may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors, on one hand, and such Initial Purchaser, on the other hand, from the
offering of the Initial Securities or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 6, in such
proportion as is appropriate to reflect not only the relative benefits referred
to above but also the relative fault of the Company and the Guarantors, on one
hand, and such Initial Purchaser, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Guarantors, on one hand,
and each Initial Purchaser, on the other hand, shall be deemed to be in the same
proportion as (i) the total proceeds from the offering of Initial Securities
(net of discounts and commissions but before deducting expenses) received by the
Company and the Guarantors and (ii) the discounts and commissions received by
such Initial Purchaser, respectively. The relative fault of the Company and the
Guarantors, on one hand, and of each Initial Purchaser, on the other hand, shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Guarantors
or such Initial Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to above. Notwithstanding the
provisions of this Section 7, (i) in no case shall either of the Initial
Purchasers be required to contribute any amount in excess of the amount by which
the discounts and commissions applicable to the Initial Securities purchased by
such Initial
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Purchaser pursuant to this Agreement exceeds the amount of any damages which
such Initial Purchaser has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
(A) each person, if any, who controls either of the Initial Purchasers within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and
(B) the respective officers, directors, partners, employees, representatives and
agents of each of the Initial Purchasers or any controlling person shall have
the same rights to contribution as such Initial Purchaser, and (A) each person,
if any, who controls the Company and the Guarantors within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and (B) the
respective officers, directors, partners, employees, representatives and agents
of the Company and the Guarantors shall have the same rights to contribution as
the Company and the Guarantors, subject in each case to clauses (i) and (ii) of
this Section 7. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this Section 7, notify such party or parties from whom
contribution may be sought, but the failure to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 7 or otherwise. No party
shall be liable for contribution with respect to any action or claim, settled
without its prior written consent, provided that such written consent was not
unreasonably withheld.
8. Conditions of Initial Purchasers' Obligations. The obligations
of the Initial Purchasers to purchase and pay for the Initial Securities, as
provided herein, shall be subject to the satisfaction of the following
conditions:
(a) All of the representations and warranties of the Company
and the Guarantors contained in this Agreement shall be true and correct on the
date hereof and on the Closing Date with the same force and effect as if made on
and as of the date hereof and the Closing Date, respectively. Each of the
Company and the Guarantors shall have performed or complied with all of the
agreements herein contained and required to be performed or complied with by it
at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers in New York as soon as practicable after
the date of this Agreement but not later than such time as the Initial
Purchasers reasonably request, and no stop order suspending the qualification or
exemption from qualification of the Initial Securities in any jurisdiction
referred to in Section 4(e) shall have been issued and no proceeding for that
purpose shall have been commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as
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of the Closing Date, prevent the issuance of the Initial Securities or the
Subsidiary Guarantees; no action, suit or proceeding shall have been commenced
and be pending against or affecting or, to the best knowledge of the Company and
the Guarantors, threatened against, the Company or any of its subsidiaries
before any court or arbitrator or any governmental body, agency or official
that, if adversely determined, could reasonably be expected to result in a
Material Adverse Effect; and no stop order shall have been issued preventing the
use of the Offering Memorandum, or any amendment or supplement thereto, or which
could reasonably be expected to have a Material Adverse Effect.
(d) Since the dates as of which information is given in the
Offering Memorandum and other than as set forth in the Offering Memorandum (i)
there shall not have been any material and adverse change, or any development
that is reasonably likely to result in a material and adverse change, in the
capital stock or the long-term debt, or material increase in the short-term
debt, of the Company or any of its subsidiaries from that set forth in the
Offering Memorandum, (ii) no dividend or distribution of any kind shall have
been declared, paid or made by the Company or any of its subsidiaries on any
class of its capital stock and (iii) none of the Company or any of its
subsidiaries shall have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the aggregate, to the Company
and its subsidiaries, taken as a whole, and that are required to be disclosed on
a balance sheet or notes thereto in accordance with generally accepted
accounting principles and are not disclosed on the latest balance sheet or notes
thereto included in the Offering Memorandum. Since the date hereof and since the
dates as of which information is given in the Offering Memorandum, there shall
not have occurred any material adverse change in the business, prospects,
financial condition or results of operation of the Company and its subsidiaries,
taken as a whole.
(e) The Initial Purchasers shall have received certificates,
dated the Closing Date, signed on behalf of the Company and the Guarantors, in
form and substance satisfactory to the Initial Purchasers, confirming, as of the
Closing Date, the matters set forth in paragraphs (a), (b), (c) and (d) of this
Section 8 and that, as of the Closing Date, the obligations of the Company and
the Guarantors to be performed hereunder on or prior thereto have been duly
performed.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance satisfactory to
the Initial Purchasers and counsel for the Initial Purchasers, of Akin, Gump,
Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., counsel for the Company and the Guarantors, to
the effect set forth in Exhibit A hereto.
(g) At the time this Agreement is executed and at the Closing
Date, the Initial Purchasers shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
independent public accountants for the Company, dated as of the date of this
Agreement and as of the Closing Date, customary comfort letters addressed to the
Initial Purchasers and in form and substance satisfactory to the Initial
Purchasers and counsel for the Initial Purchasers with respect to the
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financial information of the Company and its subsidiaries contained in the
Offering Memorandum. Prior to the Closing Date the Initial Purchasers shall have
received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a report with respect to the Company's
accounts payable satisfactory to the Initial Purchasers.
(h) The Initial Purchasers shall have received an opinion,
dated the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Initial Purchasers, covering such matters as are customarily covered in such
opinions.
(i) ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall have been
furnished with such documents, in addition to those set forth above, as they may
reasonably require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 8 and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions herein contained.
(j) Prior to the Closing Date, the Company and the Guarantors
shall have furnished to the Initial Purchasers such further information,
certificates and documents as the Initial Purchasers may reasonably request.
(k) The Company, the Guarantors and the Trustee shall have
entered into the Indenture and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(l) The Company and the Guarantors shall have entered into the
Registration Rights Agreement and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(m) The New Credit Facility shall be executed and delivered
prior to, or simultaneously with, the Closing of the Offering on substantially
the terms described in the Offering Memorandum, the Initial Purchasers shall
have received counterparts, conformed as executed, of the New Credit Facility
and such other documentation as they deem necessary to evidence the consummation
thereof and the Company shall be aware of no reason which would prevent the
consummation thereof.
(n) There shall not have been any announcement (a "Rating
Downgrade Announcement") by any "nationally recognized statistical rating
organization," as defined for purposes of Rule 463(g) under the Securities Act,
that (i) it is downgrading its rating assigned to any class of securities of the
Company or (ii) it is reviewing its ratings assigned to any class of securities
of the Company with a view to possible downgrading, or with negative
implications, or direction not determined.
All opinions, certificates, letters and other documents required
by this Section 8
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to be delivered by the Company and the Guarantors will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and substance
to the Initial Purchasers and their Counsel. The Company and the Guarantors
shall furnish the Initial Purchasers with such conformed copies of such
opinions, certificates, letters and other documents as they shall reasonably
request.
9. Initial Purchasers' Information. The Company and the
Guarantors acknowledge that the statements with respect to the offering of the
Initial Securities set forth in the last paragraph of the cover page and the
fourth paragraph and the fifth sentence of the sixth paragraph under the caption
"Plan of Distribution" in the Offering Memorandum constitute the only
information relating to any of the Initial Purchasers furnished to the Company
in writing by or on behalf of any of the Initial Purchasers expressly for use in
the Offering Memorandum.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the Initial
Purchasers, the Company and the Guarantors contained in this Agreement,
including the agreements contained in Sections 4(f) and 11(d), the indemnity
agreements contained in Section 6 and the contribution agreements contained in
Section 7, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of either of the Initial Purchasers, any
controlling person thereof, or by or on behalf of the Company and the Guarantors
or any controlling person thereof, and shall survive delivery of and payment for
the Initial Securities to and by the Initial Purchasers. The representations
contained in Section 5 and the agreements contained in Sections 4(f), 6, 7 and
11(d) shall survive the termination of this Agreement, including any termination
pursuant to Section 11.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the Company
from the Initial Purchasers, without liability (other than with respect to
Sections 6 and 7) on the Initial Purchasers' part to the Company or any of the
Guarantors if, on or prior to such date, (i) the Company or any of the
Guarantors shall have failed, refused or been unable to perform in any material
respect any agreement on their part to be performed hereunder, (ii) any other
condition to the obligations of the Initial Purchasers hereunder as provided in
Section 8 is not fulfilled when and as required in any material respect, (iii)
in the reasonable judgment of the Initial Purchasers, any material adverse
change shall have occurred since the respective dates as of which information is
given in the Offering Memorandum in the condition (financial or otherwise),
business, properties, assets, liabilities, prospects, net worth, results of
operations or cash flows of the Company and its subsidiaries, taken as a whole,
other than as set forth in the Offering Memorandum, (vi) there shall have
occurred a Rating Downgrade Announcement,
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(v) any securities of the Company shall have been suspended from trading on an
exchange or (vi)(A) any domestic or international event or act or occurrence has
materially disrupted, or in the opinion of the Initial Purchasers will in the
immediate future materially disrupt, the market for the Company's securities or
for securities in general; or (B) trading in securities generally on the New
York or American Stock Exchange shall have been suspended or materially limited,
or minimum or maximum prices for trading shall have been established, or maximum
ranges for prices for securities shall have been required, on such exchange, or
by such exchange or other regulatory body or governmental authority having
jurisdiction; or (C) a banking moratorium shall have been declared by federal or
state authorities, or a moratorium in foreign exchange trading by major
international banks or persons shall have been declared; or (D) there is an
outbreak or escalation of armed hostilities involving the United States on or
after the date hereof, or if there has been a declaration by the United States
of a national emergency or war, the effect of which shall be, in the Initial
Purchasers' judgment, to make it inadvisable or impracticable to proceed with
the offering or delivery of the Initial Securities on the terms and in the
manner contemplated in the Offering Memorandum; or (E) there shall have been
such a material adverse change in general economic, political or financial
conditions or if the effect of international conditions on the financial markets
in the United States shall be such as, in the Initial Purchasers' judgment, to
make it inadvisable or impracticable to proceed with the delivery of the Initial
Securities as contemplated hereby.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone or telephonic facsimile and, in either case, confirmed in
writing by letter within five days thereof.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to clause (vi) of Section 11(b),
in which case each party will be responsible for its own expenses), the Company
and the Guarantors shall reimburse the Initial Purchasers for all out-of-pocket
expenses (including the reasonable fees and expenses of the Initial Purchasers'
counsel), reasonably incurred by the Initial Purchasers in connection herewith.
12. Notice. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to the
Initial Purchasers shall be mailed, delivered, telecopied and confirmed in
writing or sent by a nationally recognized overnight courier service
guaranteeing delivery on the next business day to Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance Department,
telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, 1285 Avenue of the Americas, New York, New York 10019-6064, Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇; and if sent to the Company or
any of the Guarantors, shall be mailed, delivered, telecopied and confirmed in
writing or sent by a nationally recognized overnight courier service
guaranteeing delivery on the next business day to HealthCor Holdings, Inc., ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief
Financial Officer, telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to
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Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., P.C., telecopy
number: (▇▇▇) ▇▇▇-▇▇▇▇.
13. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Initial Purchasers, the Company and the
Guarantors and the controlling persons and agents referred to in Sections 6 and
7, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Securities from the Initial Purchasers.
14. Construction. This Agreement shall be construed in accordance
with the internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are
included solely for convenience of reference and are not to be considered a part
of this Agreement.
16. Counterparts. This Agreement may be executed in various
counterparts which together shall constitute one and the same instrument.
[Signature page to follow]
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If the foregoing correctly sets forth the understanding among the
Initial Purchasers, the Company and the Guarantors please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
HEALTHCOR HOLDINGS, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
HEALTHCOR INC.
PHYSICIANS HOME HEALTH NETWORK, INC.
HEALTHCOR OXYGEN AND MEDICAL
EQUIPMENT, INC.
HEALTHCOR REHABILITATION SERVICES, INC.
HEALTHCOR PHARMACY, INC.
HEALTHCOR FOUNDATION
HC PERSONNEL RESOURCES, INC.
CARE NETWORK, INC., as Guarantors
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
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Accepted and agreed to as of
the date first above written:
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Managing Director
CHASE SECURITIES INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
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SCHEDULE I
Principal Amount
Initial Purchaser of Initial Securities
----------------- ---------------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc. $68,000,000
Chase Securities Inc. $12,000,000
-----------
Total $80,000,000
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